THE perennial question for the beef industry has become “how do we improve prices?”.
Why, when the dollar has softened, there is strong global demand for protein and our herd is rapidly shrinking, do producers struggle to attract a price that reflects what their product is worth, relative to the cost of production and today’s cost of living?
There is a lot of beef out there and nobody wants to pay any more than they have to.
We are highly exposed to this through our “level playing field” position and the effects are made worse by our cost of production when our competitors are either subsidised, have cheap labour, or both.
We need to be selling a product recognised as premium and worth paying for.
So can the Global Roundtable on Sustainable Beef’s plan of a verification system to guarantee our sustainability help prices and our image?
It might give us a marketing edge that underscores our clean, green image, and therefore retain market share.
But politics seems to play a bigger role in market share, as seen with recent free trade agreements (such as the US and Korea) and declining market share, despite our traceability edge.
It’s possible that for entry into some markets this could become a “must have”, like being free of hormone growth promotants in some regions.
But will other countries take it seriously? After all, our National Livestock Identification System traceability hasn’t helped our market share.
And do enough markets exist that are willing to pay substantially more for a product verified as sustainably produced for us to be able to cash in?
In 2013, the markets that drove export volumes were China, the Middle East and the US.
These markets’ buying decisions are being made on price and balance of trade, not whether the herds the beef is from are doing something to save the Great Barrier Reef.
And while the beef herds of Queensland, in particular the Fitzroy River region, might have a handy marketing edge in being able to say they’re using 'reef safe' practices, what widely recognised and globally marketable cause can the rest of the country’s beef industry hang its hat on?